Commonly Used Payment Terms For International Trade

Here are some commonly used payment terms used when exporting or importing goods.

• Cash In Advance - Upfront cash to the exporter prior to shipment
• Letter of Credit (L/C) - A letter issued by a bank that authorizes the bearer to draw a stated amount of money from the issuing bank, its branches, or other associated banks or agencies
• Open Account - An unpaid credit order
• Consignment - Payment is deferred until goods are sold
• Telegraphic Transfer (T/T) - Electronic transfers of funds through banks